Commercial real estate experts anticipate increased multifamily transaction activity this year, according to Berkadia’s 2025 Multifamily Powerhouse Poll Outlook. This is driven by an improving economic outlook, with occupancy stabilizing and absorption outpacing new supply.
The eighth annual poll, which was conducted in December, collected insights from 320 Berkadia investment sales advisers and mortgage bankers to assess the short- and long-term outlook for multifamily investment and the capital markets environment.
According to the survey, the majority of respondents, 59%, said they expect renter demand to exceed apartment supply this year. The majority also weighed in that Class A assets will be the most attractive investment type this year, followed by Class B assets and affordable housing.
Nearly half of the respondents, 47%, cited that inflation will continue to have a significant to moderate impact on commercial real estate activity; however, the majority, 62%, said they believe activity will increase under the new Trump administration this year.
“Despite ongoing challenges like inflationary pressures, high interest rates, and rising distressed opportunities, investors continue to recognize significant opportunities in the multifamily sector,” said Ernie Katai, Berkadia executive vice president and head of production. “Although market fundamentals are expected to remain soft through 2025 with new supply coming online, the core drivers of rental housing remain solid, and investor confidence in the sector remains high.”
Additional key findings from Berkadia’s proprietary poll include:
- 55% of respondents said private investors, including 1031 exchange buyers, will drive the most transaction activity in 2025, followed by institutional investors;
- Respondents expect institutional investors to focus on core, 22%, and core-plus, 21%, opportunities this year. Joint ventures, preferred equity recapitalizations, and value-add opportunities each had moderate interest;
- The majority of respondents, 75%, said government-sponsored enterprises Fannie Mae and Freddie Mac will be the most active lending source this year, followed by private funds/debt funds and banks;
- 71% of respondents reported that they expect cap rates to remain about the same as where they are today through the end of the year, with exit cap rates underwritten 25 to 50 basis points higher than the going-in cap rates;
- 81% of respondents said they anticipate an increase in distressed opportunities this year;
- Respondents noted the Southeast will be the top geographic region for multifamily investment this year, followed by the Southwest and the Midwest; and
- Outside of multifamily, respondents cited the single-family rental and build-to-rent sector as well as affordable housing as most appealing to investors.
